Renewable Fuel Standard and RIN Fraud

AFPM President Charles T. Drevna testified on 11th July before the House Subcommittee on Oversight and Investigations. He spoke of Renewable Fuels Identification (RIN) number fraud and efforts being made by the EPA to make sure market integrity in the RFS program are maintained.

Comments

Drevna said that although the industry has recently been engaged in productive discussions with the EPA, biofuel producers and other stakeholders to attempt to resolve the situation, EPA has failed to embrace a solution. Drevna also said, ‘the reality is that the EPA is failing to ensure market integrity in the RFS program, and the RFS is failing American consumers. Rather than focusing its efforts on creating a program that will help prevent biodiesel producers from committing RIN fraud in the future, EPA has chosen to sit back and rely upon a buyer beware enforcement scheme that penalises the victims of fraud.

‘The current system needs to be fixed to avoid the continuation of fraud and unnecessary costs to consumers. In order to comply with the RFS without penalty, the system to purchase RINs much work. Currently, it does not and refiners must exist in an environment of uncertainty and risk, confounding their ability to comply with the law.’

RINs and refiners

To date, US refiners have unknowingly purchased 140 million fraudulent RINs and paid approximately US$ 200 million in RIN replacement costs. Refiners, as the victims of fraud, have borne the costs associated with settlement agreements and accompanying fines placed on them by the EPA for unknowingly purchasing fraudulent RINs.